NGO/NPO Registration Archives

Benefits of NGO Donation Tax Exemption under Section 12A and 80G Introduction Have you heard about NGOs? Many organizations work selflessly to support people with basic human needs. Under the Income Tax Act, Sections 12A and 80G provide important provisions for NGO donation tax exemption. If a trust or organization is registered under these sections, it becomes eligible for tax benefits. This not only helps the NGO but also provides tax exemptions to donors contributing to the cause. What is section 12A? Organizations like NGOs, charitable trusts, and section 8 companies are working to help people without any motive of profit. for these kind of such organization, it is important to register in section 12A to avail the taxation benefits. Organization must involve in charitable activities to be eligible for the registration of 12A. Who needs to register under section 12A? If you are willing to start a charitable trust in India, you must register your trust or organization under section 1A. Any Group who is involved in charitable activities needs to file 12A. Eligibility for section 12A To be eligible for registration of sections 12A, there are several things that an organization must know about. The following information is: Section 12A registration is applicable for the organizations whose only intention is charity. There should not be any profit-purpose activities in the trust or institutions. It must be registered as a trust or society under the appropriate laws. The organization is not allowed to spend income or assets for the benefits of its members or any other specific person. It is mandatory for organizations to maintain the books of accounts. Must file an income tax return under section 139 of the income tax act, even if it is eligible for exemption. The organization is not allowed to engage in any political activities. Benefits of Section 12A for NGOs Tax exemption Organizations who are having 12A certificate with them are exempted from paying income tax on their generated income. Without registration, they cannot avail of these benefits. Grants from national and international organizations If the trust or society is registered, they can get funds from government, private, and international organizations, which will help an organization to enhance their credibility. proof of existence The certificate under section 12A acts as a valid and clear proof of the existence of the organization. It helps trust to secure funds or loans from the government. Wide recognition With the 12A certificate, NGOs and societies are allowed to gain wide recognition with the charitable activities. Get expert help with 80G5 registration and the Online 12A registration process for tax exemptions and compliance. Ensure smooth approval with our professional support! What is section 80G? NGO gets taxation benefits by registering itself but there is no profit for the person who is making donations. The income tax offers tax benefits to donors as well in certain provisions. Section 80G is one of such sections which provides the benefits to donors. The purpose of this section is to support entities that are engaged in social or cultural development activities. Who needs to register under section 80G Below mentioned entities must register under section 80G. Non-Governmental Organizations (NGOs) Charitable trusts or groups Section 8 companies Charitable or religious institutions with no-profit purpose Eligibility for section 80G It is only applicable for non-profit organizations like registered trusts, societies, or section 8 companies. Organization must have registration under section 12A. Should not use the income of charitable trust. Regularly maintain the accounts of the financial transactions. Benefits of section 80G for NGO Taxation benefits for donors If a trust or organization has an 80G certificate, then the donor who is making a donation with that organization can claim the deduction on their taxable income. Enhanced credibility The certificate of 80G helps an organization enhance the credibility of their firm and also, increase the goodwill of the company. which will lead more donors for the NGOs. Attracts more donors Section 80G is helpful for donors as it provides taxation benefits to them. if a company has registered and filed under section 80G, then, the donors have the right to claim deduction on their specified taxable income. Transparency and accountability For maintaining the registration, an entity requires to adhere to specific transparency and reporting standards, which ensures that the entity is operating with standard accountability. It also builds strong trust among donors, Easily access to government funding With the 80G certificate, NGOs or charitable organizations are more likely to have funds or grants from government as it makes the trust more trustworthy and eligible. Increase the reputation As government will provide funds and donors will also donate to the NGOs, it will help the organization to increase the reputation in the eyes of public. Conclusion NGOs or organizations that have obtained the 12A and 80G certificates are eligible for ngo donation tax exemption benefits under the Income Tax Act. These certificates help NGOs secure more funding from the government and attract donations from donors. Additionally, they encourage existing donors to contribute more. Suggested Read : 12AB and Section 80G Registration Section 80G of Income Tax Act Form 10BD vs Form 80G Renew a Trust License in India Important compliances for NGOs in India FAQ NGOs are eligible for tax exemptions with section 12A certificate. Organizations who are totally involved in charitable activities and have a 12A certificate are eligible for an 80G certificate. NGO needs to submit an online application form 10A to the commissioner of income tax with necessary documents. 12A certificate provides tax exemption benefits to the organization. Meanwhile, the 80G certificate provides benefits to the donors who are donating in the organization. 12A and 80G registrations are typically valid for five years. However, there is not any particular last date for the renewal.

NGO/NPO Registration

NGO Donation Tax Exemption under Section 12A and 80G

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12AB and Section 80G Registration